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c. means that the shareholder can accumulate preferred stock until it
is equal to the par value of common stock at which time it can be
converted into common stock.
d. enables a preferred stockholder to accumulate dividends until
they equal the par value of the stock and receive the stock in place of
the cash dividends.
P45.
According to the FASB, redeemable preferred stock should be
a. included with common stock.
b. included as a liability.
c. excluded from the stockholders’ equity heading.
d. included as a contra item in stockholders' equity.
S46. Cumulative preferred dividends in arrears should be shown in
a corporation's balance sheet as
a. an increase in current liabilities.
b. an increase in stockholders' equity.
c. a footnote.
d. an increase in current liabilities for the current portion and long-
term liabilities for the long-term portion.
47. At the date of the financial statements, common stock shares
issued would exceed common stock shares outstanding as a result of
the
a. declaration of a stock split.